It’s easy to become smug about valuing coins. On the surface it seems easy – just look up the date, mintmark and grade of your coin in your favorite price guide or auction prices realized list and there you have it!

This may be fine for common date Mint State 65 Morgan dollars with a “retail” value of less than $200, or common date MS 65 Walking Liberty half dollars, worth less than $100 “wholesale,” for example. Such coins trade on the wholesale market in very tight price ranges.

But the truth is, there are numerous hidden nuances in valuing coins that are not obvious…especially for rare coins with considerably higher market values. Of course, if you’re just having fun and don’t care about throwing away $75,000 or $100,000 by paying too much when purchasing a rare coin for $250,000, for example, then just let yourself get hammered by the other players in the market.

But I don’t know of many people, even among the truly wealthy, who throw money away like that. If you’re like most people, you most likely fret about paying too much for most any coin – whether it’s valued at the $1,000, $10,000, or $100,000 level, or more. And most often buyers don’t realize they’ve paid way too much for a coin until they try to sell it…most likely many years later.

On the other hand, there are savvy, seasoned buyers who’ve taken the time to gain experience in the coin market and have profited handsomely over the long-haul. But if you’re not in that camp, it might actually pay off, financially, to spend a little money and get an expert, third-party appraisal and opinion of the rare coins you’ve purchased in order to evaluate your holdings and make intelligent purchases in the future.

Here’s an example of price variations, using Mint State 1796 quarters as an example, which reveals how buyers can end up paying way too much for a coin. Of course there’s no danger in buying a bargain, but getting lucky that way rarely happens. The 1796 quarter is a one year design type of which there were just 6,146 pieces coined, according to the Redbook. Prices range as follows in the half-dozen, or so, major price guides available in the market today:

1796 25c Mint State 63

$120,000 to $165,000

a differential of 37.50%!

1796 25c Mint State 64

$180,000 to $265,000

a differential of 47.22%

1796 25c Mint State 65

$305,500 to $400,000

differential of 30.93%!

For most buyers and sellers this is serious business. If you pay near the top end of those ranges, especially for a coin that doesn’t pass muster, how are you going to get your money back, or even profit? Most of the dangers in buying rare coins involve coin grading, relative to pricing. And remember, price guides are only that – guides.

Here are a few questions to ponder, regarding price guides? How often and how are they updated and who’s doing the work? What pricing sources were used to update the prices? Was a price listed based on a trend, one auction sale, or even another price guide such as a wholesale price guide? Was a price listing based on the sale of a coin that barely made a grade or was perceived as over-graded, or conversely, was it based off the sale of a coin that was truly superior to average examples on the market, unreasonably elevating a price listing?

Here are a few grading questions to consider…Do you know the difference between a coin that barely makes a grade, or is perceived as being over-graded, and one that is solid to high-end for the grade? Do you know the difference between a coin that has “original,” un-tampered with surfaces and one that has been lightly cleaned and artificially re-toned but has made it through a grading service? Do you know the purpose of CAC?

These are some of the reasons CAC was founded – to weed out inferior coins and identify, by its green sticker, PCGS and NGC coins that are solid to high-end for their grades. In nearly all cases, the market is reflecting higher prices for CAC-stickered coins than for non-stickered coins graded the same. If a coin appears at auction or for sale at a coin show and doesn’t have a CAC sticker, a buyer must ask why not?

The following table shows the trend of auction prices realized from recent years for 1796 quarters. I encourage you to study this list carefully…scratch your head…and ponder about why there were such huge price differences between these auction prices realized.

1796 25c

MS 65 NGC

1/9/2011

$207,000

1796 25c

MS 65 PCGS

8/15/2010

$322,000

1796 25c

MS 64PCGS/CAC

01/08/12

$253,000

1796 25c

MS 64 PCGS

8/5/2009

$103,500

1796 25c

MS 64 NGC

3/20/2011

$80,500

1796 25c

MS 64 NGC

5/3/2009

$80,500

1796 25c

MS 64 NGC

1/11/2009

$86,250

1796 25c

MS 63 PCGS

1/8/2012

$97,750

1796 25c

MS 63 PCGS

11/10/2011

$161,000

1796 25c

MS 63 PCGS

9/30/2010

$172,500

The bottom two MS 64 examples were for sales of the same coin. Ask yourself why the MS 63 examples eclipsed the sale prices of most of the MS 64 examples. Why did the CAC stickered MS 64 example sell for so much more than the others? Why did it outsell the MS 65 example sold most recently? If you can’t answer these questions for yourself, you most likely need the help of an expert you can trust.

Wouldn’t you have liked to have been the person who sold the MS 64 PCGS/CAC 1796 quarter for $253,000, after most likely having purchased it years earlier for a fraction of that price? Or wouldn’t you have liked to be one of the sellers of the two MS 63 examples that outsold most of the MS 64 examples? But sadly, the opposite is more likely for most buyers who are not seasoned, or who do not employ the counsel of an expert they trust – they suffer losses.

I frequently get phone calls from people buying coins of this caliber who think this is easy and believe they’ve got the coin market all figured out. But remember, we’re dealing with money and there are a lot of sharks out there in the market ready to take yours – or buyers simply make mistakes. Don’t you want to be on the winning side?

Great profits have been made in the coin market over the long-haul, and it’s been a lot of fun for many collector/investors. Truly great coins, superior for their grades, bring premium prices when they come on the market. Wouldn’t you like your rare coins to be in that camp?

If you have questions about valuing coins or are in need of a professional appraisal or consultation, call or email me anytime.

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There are a lot of sharks out there…just email me and I can help. lol. I would never spend more than a few hundred for a great coin. Maybe more if I was paying for the gold bullion. This way I can make good decisions without too much risk, especially since I’m a knowledgeable collector. I don’t think many high-ballers who are purchasing these thousand dollar coins are going to get anything more out of the hobby than joy. Speculators probably rarely turn a profit.

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